In a bid to rid fraudulent and unethical practices in corporate organizations, KPMG Tanzania launched a whistle-blowing service on Thursday, says KPMG-Kenya forensic manager Linah Ottichilo.
“An effectively functioning hotline service can significantly improve an organization’s capability to detect fraud,” Ottichilo noted.
While explaining the significance that the hotline service in minimizing corporate crimes, a risk consultant in Kenya, Augustino Mbogella said “whistleblowing hotline is a key component of your fraud risk management strategy, as organizations that have reporting lines are more likely to detect fraud through tips.”
With the loss risk of at least 5 percent of annual revenue to fraudulent activities in corporate organizations according to Association of Certified Fraud Examiners 2016 report, Mbogella noted that organizations lose around $6.3 billion to fraud yearly.
Irrespective of company size or industry, fraud and corruption remains a persistent and corrosive influence, though many countries and international organizations have redoubled efforts to investigate, punish and prevent fraud.
However, people are willing to report corrupt or unethical business behavior. In other words, organizations with whistleblowing channels can receive very useful reports that would spur them to act swiftly and prevent these issues from becoming complex problems.
There has been growing awareness about the crucial role of whistleblowing in fighting corruption and ensuring ethical business behavior across the African continent in both public and private sectors.
Corporate financial crimes that are mostly detected through document examination, auditing and management review and sometimes through account reconciliation are now being detected in organizations through the whistleblowing strategy. Some organizations provide rewards and protection for whistleblowers.
Citizens in several countries in the world are becoming aware of the dark and oppressive political, economic and financial powers being exercised over their daily lives as a result of whistleblowers activism. Secretive and self-serving deeds of political and business elites in several African countries have come to light thanks to whistleblowers.
Attesting to the significant role whistleblowing takes in uncovering crimes in Kenya, Deloitte partner, William Oelofse in a report stated that “in recent years, we have witnessed the uncovering of high profile fraud and corruption through whistleblowers.”
So far, only seven of 54 countries have passed whistleblower laws, compared to 11 of 28 EU countries.